By Kayle Crosson | Staff Writer
A recent proposal by the youth wing of Fine Gael to reduce the minimum wage by €2 in an effort combat the relatively high level of youth unemployment which is currently at 24.3%, has met with criticism.
In order to supplement the subtraction of €2 from the minimum wage rate of €8.65 per hour Young Fine Gael proposes the implementation of an Earned Income Tax Credit.
Such a tax credit system would allow for workers to maintain their level of earned income, whilst governmental wage subsidies will lower the cost of production for businesses.
Young Fine Gael argues that their proposition would lower cost for establishing businesses in Ireland therefore boosting the economic performance of domestic companies, as well as acting as an incentive to attract foreign investment.
This proposition has faced criticism by both Ogra Fianna Fail and Labour Youth, with the issue of an Earned Income Tax Credit being particularly controversial.
Labour Youth released a statement criticizing the tax credit system that has been proposed, suggesting the State would be encouraging a competition of low wages between firms, “State should not subsidise or indeed incentivise low pay and should not encourage a race towards lower wages among employers.”
The Chief Spokesperson for Ogra Fianna Fail, Kate Feeney, gave credit to Young Fine Gael for trying to construct a solution to youth unemployment.
However, in her statement regarding the Earned Income Tax Credit, she felt the initiative is, “an uncosted and risky proposal that would give employers an incentive to cut employee pay while leaving the taxpayer to pick up the tab.”
According to Councillor Feeney, Ogra Fianna Fail’s proposed budget will be released in the coming weeks. It would appear the issues of minimum wage and earned income tax credits will remain a focal point for economic debate among youth political parties ahead of the publication of the national parties budget proposals.
